What is the issue?
The economy in Zimbabwe has become a very dreadful one over the past decade. The rate of inflation is so high that people living in Zimbabwe literally have to bring millions of dollars with them when they grocery shop. People in Zimbabwe cannot save their money, either, because the value of their dollar decreases each day. This has caused very poor living conditions for the residents and a very huge problem for the government.
How did it happen?
Zimbabwe, in fact, used to have a terrific economy. The land was so rich that it could grow all sorts of food, which would then be exported around the world.
Robert Mugabe, President of Zimbabwe
However, in the early 2000s, Robert Mugabe (President of Zimbabwe) confiscated the white-owned farmland in his country. Of course, without any farms producing crops, there was nothing to export, and Zimbabwe lost all of its money. The country owed the International Monetary Fund a large sum of money, but Mugabe refused to pay the debt. Soon after these events came Zimbabwe’s hyperinflation.
Mugabe’s government kept printing trillions of Zimbabwean dollars to keep the ministries functioning, which only made inflation worse because there was too much useless money in circulation.
What is hyperinflation?
Regular inflation is normal. When your parents were growing up, things cost less than they do now. Of course, people nowadays get paid more now than years ago. The minimum wage increases with the cost of living, and that is normal inflation.
Hyperinflation is when the rate of inflation goes from standard to drastic, and you end up spending millions of dollars on a loaf of bread.
How is it affecting people living in Zimbabwe?
Inhabitants of Zimbabwe are living in terrible conditions right now. Between 70-80% of people are out of work, the drinking water is not usually sanitary, and food is hard to come by. With these unsanitary conditions come a number of health issues. Thousands of Zimbabweans are flooding to South Africa to get medical aid because of an outbreak of cholera in the country since the country cannot afford to pay doctors or nurses or even to purchase medicine or proper medical supplies.Children are not getting the education they deserve due to a lack of funding.
With the hyperinflation in Zimbabwe also comes the introduction of higher denomination banknotes by Zimbabwe's central bank in an attempt to limit cash shortages, amid world record hyperinflation. As of early 2008, the country had issued a $10,000,000.00 note which was not even worth enough to buy a loaf of bread. The introduction of the $10,000,000.00, marks the largest denomination paper bill ever printed.
A marketplace and bus terminal in Zimbabwe.
Facts:
- 500 000 Zimbabwean dollars is equal to about 25 American cents.
- Recorded in November 2008, Zimbabwe’s annual rate of inflation was 89.7 sextillion percent, which meant prices doubled every 24.7 hours.
- In 2006, the price of a sheet of toilet paper was 417 Zimbabwean dollars. That was three years ago, when the annual rate of inflation hadn’t quite yet reached 1000 percent.
- In April 2009, Zimbabwe abandoned the printing of its own dollar and started to use the South African rand and US dollar as their forms of currency. They will not reintroduce the Zimbabwean dollar until 2010.
What is the issue?
The economy in Zimbabwe has become a very dreadful one over the past decade. The rate of inflation is so high that people living in Zimbabwe literally have to bring millions of dollars with them when they grocery shop. People in Zimbabwe cannot save their money, either, because the value of their dollar decreases each day. This has caused very poor living conditions for the residents and a very huge problem for the government.
How did it happen?
Zimbabwe, in fact, used to have a terrific economy. The land was so rich that it could grow all sorts of food, which would then be exported around the world.
However, in the early 2000s, Robert Mugabe (President of Zimbabwe) confiscated the white-owned farmland in his country. Of course, without any farms producing crops, there was nothing to export, and Zimbabwe lost all of its money. The country owed the International Monetary Fund a large sum of money, but Mugabe refused to pay the debt. Soon after these events came Zimbabwe’s hyperinflation.
Mugabe’s government kept printing trillions of Zimbabwean dollars to keep the ministries functioning, which only made inflation worse because there was too much useless money in circulation.
What is hyperinflation?
Regular inflation is normal. When your parents were growing up, things cost less than they do now. Of course, people nowadays get paid more now than years ago. The minimum wage increases with the cost of living, and that is normal inflation.
Hyperinflation is when the rate of inflation goes from standard to drastic, and you end up spending millions of dollars on a loaf of bread.
How is it affecting people living in Zimbabwe?
Inhabitants of Zimbabwe are living in terrible conditions right now. Between 70-80% of people are out of work, the drinking water is not usually sanitary, and food is hard to come by. With these unsanitary conditions come a number of health issues. Thousands of Zimbabweans are flooding to South Africa to get medical aid because of an outbreak of cholera in the country since the country cannot afford to pay doctors or nurses or even to purchase medicine or proper medical supplies.Children are not getting the education they deserve due to a lack of funding.
With the hyperinflation in Zimbabwe also comes the introduction of higher denomination banknotes by Zimbabwe's central bank in an attempt to limit cash shortages, amid world record hyperinflation. As of early 2008, the country had issued a $10,000,000.00 note which was not even worth enough to buy a loaf of bread. The introduction of the $10,000,000.00, marks the largest denomination paper bill ever printed.
Facts:
- 500 000 Zimbabwean dollars is equal to about 25 American cents.
- Recorded in November 2008, Zimbabwe’s annual rate of inflation was 89.7 sextillion percent, which meant prices doubled every 24.7 hours.
- In 2006, the price of a sheet of toilet paper was 417 Zimbabwean dollars. That was three years ago, when the annual rate of inflation hadn’t quite yet reached 1000 percent.
- In April 2009, Zimbabwe abandoned the printing of its own dollar and started to use the South African rand and US dollar as their forms of currency. They will not reintroduce the Zimbabwean dollar until 2010.
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